Lots of correspondents, mainly from the left, are writing about the post-Covid type of capitalism. US President Biden's apparent renovation of his own version of the 'New-Deal' is propelling the argument for a type of Keynesianism in most of the western world. The prior, von-Hayek model, which reduced State expenditure, sought low taxes, free trade and trickle down benefits, appears to have failed - even among the cautious EU. We know that Reagan and Thatcher set up the political shape required to energise Hayek's economic ideas. But now economists, including Eliot, the newspaper Guardian economic correspondent, are praising the return of Keynes, despite the continuing traditional political shape of Reagan and Thatcher, which has been maintained. State money is distributed, sure. But the Reagan/Thatcher attack-laws on labour rights, remains a vengeance.
Half-baked Keynesianism actually started not with Covid but with the 2008 collapse of the banks. The banks fell and their rescuing was a very particular State-like shift away from Hayek (but not at all towards Keynesianism). It started with the huge quantitative easing from States to banks and then from banks to the stock exchanges and then from stock exchanges to shares of companies and then from shares to the super wealthy. Hayek's trickle down benefits and the increase of profits then became no sorts of benefits at all, trickle or otherwise, just simply austerity. This was literally capitalism-as-social-theft. In previous blogs we have noted the decline and indeed the destruction of social democracy in the West - the political sign of capitalism-as-social-theft in the West.
Has Biden (or for that matter UK's Prime Minister Johnson) pushed history back? Is the old Keynesianism really emerging ? Sorry, no. It is true that social and political turmoil is rising, including in the West. It is true that Biden has distributed large, individual, increases of wages and some parts of welfare. (Boris peels off here.) It is also true that he wants to increase taxes, particularly corporation taxes, to renovate the USA's infrastructure and to broaden the development of green jobs and industry. But the conditions for Keynes no longer apply. How is this? It is the fact that the waves of capitalism are not constant. They do not repeat their patterns or combinations, anymore than the evolution of humanity repeats its lives. Are there discernible patterns and cycles in capitalism? Yes; patterns and cycles are understandable, similar and pliable, but because they are always moving they are never exactly the same.
The content of Biden's plan has little to do with the terms and conditions of Roosevelt's New Deal. Roosevelt saw the rise of fascism as little worse than his views about the danger of the UK's empire. (At one point in WW2 at a separate meeting with Stalin, he suggested that India should be like the Soviet Union and break away from the British Empire to allow modern development.) Roosevelt's State wealth distribution could dominate the great US corporations, their taxes handed over, as the price to control risings and to prevent the grip of communism in the US.
Biden has no such context. (And Johnson is another joke entirely when he denies the continuation of austerity to his UK electorate.) The great corporations, nominally in the US, that Biden requires for the use of his State taxes, are not of the like of the 1930s of Ford or Bessemer Steel. They are located in the global sphere. Equally, there is no 'communist threat' forcing US corporations to accept their tax payments in order to defend capitalism against the workforce of the US. The workforce of the US are barely beginning to organise. Instead it is 'communist China' that is the threat for the new corporations that are based globally. In reality the 'threat' that Biden is trying to use on the corporations in the US is the 'threat' of Trump-based fascism. A step that would rapidly place China as the leading economic country in the world. Alas, as history suggests, big capital has had a rather respectful response when it came to associating with fascism.
More broadly, among the studies of modern capitalism (see for example the New Left Review piece by Cedric Durand - 'Forces of Change') the impending contradictions of both the Hayek and Keynes capitalisms suggests the need for an entirely new cycle. A cycle that requires a particular, new character, one of building drastic social and political interventions. Why? In order to continue the sovereignty of the economics of capitalism, so far dominated by us and by our five-hundred year capitalist system. Because ... capitalism's recent dynamics are breaking down.
It is necessary to avoid any foolish assumptions that capitalism will destroy itself, a view that many times has been shouted out from childish versions of Marx or Lenin etc. So far the capitalist drive has recovered and reorganised all its crises. But it is equally blind to imagine that previous capitalisms will simply repeat themselves. More; the contradictions and social stresses of capitalism become more heinous in ever mounting stages. In such situations, catastrophes make the capitalist system less and less bearable for the overwhelming majority of the people of the world. It is arguable that we are at just such a terrifying moment today. And the consequences become more and more barbarous.
To pick up the new context of capitalism's next circle (or circles) a set of observations should be offered.
1. Note the sets of analyses regarding the mechanisms of capitalism, largely independent of social and political interaction, on the assumption that the economy of capitalism is the core of society. The greatest such model was the amazing books and essays of Ernest Mandel.
2. The 'self destruction of capitalism' idea is simply empty in all of its history.
3. But today we note that the crisis of capitalism becomes both intensely more problematic - AND - intensely more tangled, with the rising social crises so common in modern times. It would be absurd not to coalesce, not to see the combinations, of what is often only described as an economic engine. The modern economic engine, now itself reorganised by effects of the world wars, is partly reordering new societies and vice versa. The analyses of modern capitalism does not proceed from a capital A then to a small b and then to c.
4. And the wider and wider mystification applied to modern capitalism has never been a more developed complexity. (This of course is part of the means designed to deny the implications of a system that exploits the overwhelming majority in the world.)
5. While capitalism in itself becomes more and more difficult, crises ridden and dangerous - the combination of the increasing social crises together with capitalism creates the more and more likelihood of human extinction. (As WW1 and WW2 hint.)
6. Capitalism has to move onwards to sustain its role in society, through competition, mergers, acquisitions, monopolies, technology and most of all labour, to create its object of wealth.
7. Logically, globalisation can only be the ultimate end for any further extension of capitalism.
8. But as globalisation is reaching its peak across the planet, it becomes weaker and weaker as a force, first because of the failures of imperialism across the globe and second because it has stalled away from the key mechanisms spelled out above.
9. This capitalism failing at its own height is most obviously apparent in the herding of wealth for personal purposes among more and more millionaires (who rarely trickle down.) Virile Capital, albeit viciously and violently, built social and technical revolutions in the past. This aspect of modern capitalism has become less and less.
10. Less apparent but more decisive is the failure of capitalism, more and more, in relation to the world's danger.
The capitalist system accepted and partly swallowed two world wars. The system and its corporations were used to defend the results including a nuclear bomb. Today capitalism is unable to solve or resolve any of the planet's main dangers; heat, nuclear battles or any sense of billions of people that they have a chance of sure progress. Today, vast resources in slowly moving ships and concentrated internet deals about wealth at light speed, are constantly bought and sold, borrowed and paid. The novelty of this endless, world above the world, is its gradual, but relentless, detachment from the world. The US holds Japan and China's debts. Both countries hold wealth equivalently more than their debts. Both countries use their US debts to pressurise sales from their countries to the US. Now Biden, and Trump before, were and are closing down China's sales. They have to. China is getting richer than the US. US capitalism, already based on money and not production, now needs to make its own products. The aim is to force decline in China. And so it rolls on.
Consider. The state capitalism of China alone is now overwhelmingly the single social advance in the last two decades. The main motor of the world's general world capitalism, capitalism led by the US, is declining at a pace. Capitalism in the West is now necessarily required to halter and diminish social welfare, political democracy and any substantial reform of the working class. Living standards are also declining. The planet is in ecological danger. Wealth is more and more concentrated and unavailable for reform within the system. Technology offers a narrow development and reflects the smallest achievements in centuries. The remains of democracy are reducing and nukes are expanding. The capitalist system no longer advances. Worse; it prepares for degeneration and social destruction.
Posted by Brian Heron at 16:48
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